PETAH TIKVA, Israel, Aug 4, 1999 (BUSINESS WIRE via COMTEX) --
ECITELECOM LTD. (NASDAQ/NM Symbol: ECIL) today announced consolidated
[unaudited] results of operations for the second quarter and six months
ended June 30, 1999.
Revenues for the second quarter increased by 47.3% to $290,210,000
compared with $197,068,000 for the second quarter of 1998. Gross
profits rose 34.4% from $112,728,000 to $151,442,000 in the second
quarter of 1999. Operating income increased by 21.8% from $43,484,000
to $52,943,000 in the second quarter of 1999. Net income for the second
quarter rose 30.5% to $53,579,000 or $0.57 per share (fully diluted)
compared to $41,026,000 or $0.52 per share (fully diluted) for the
comparable period in 1998.
Revenues for the six months ended June 30, 1999 increased by 50.8% to
$574,691,000 compared with $381,209,000 for the comparable period in
1998. Gross profits rose 39.6% from $217,217,000 to $303,300,000 in the
first half of 1999. The operating loss for the first half of 1999 was
($10,976,000) compared to operating profit of $84,539,000 for the first
half of 1998. Including one-time merger-related expenses totaling $112,
709,000 and consisting of restructuring charges and in-process R&D, the
net loss for the first half of 1999 was ($8,514,000) or ($0.07) per
share (fully diluted) compared to net profit of $79,411,000 or $1.00
per share (fully diluted) for the comparable period in 1998.
These results refer to ECI Telecom after the merger with Tadiran
Telecommunications which occurred in 1999. They do not include Tadiran
Telecommunications for the parallel periods in 1998.
For the second quarter of 1999, Infrastructure, which currently
includes primarily DCME, SDH, and Cross Connects, recorded revenues of
$167 million. Access, which is primarily Pairgain, xDSL, HFC and
wireless local loop, had revenues of $105 million. Networks, which
currently includes primarily data network internet, IP telephony, and
Hi-TV, recorded $18 million in revenues.
Commenting on the results, David Rubner, President and CEO of the
Company said, "The second quarter was very productive. We made
excellent progress in both the consolidation of Tadiran and in the
development of important new products.
"The integration of Tadiran Telecommunications is proceeding very well.
Functions have been consolidated and facilities rationalized. We have
realized cost savings and are making good progress in achieving revenue
synergies. We already see the pull through of the Cross Connects
through ECI sales channels and significant new opportunities for our
wireless local loop. During the quarter, we purchased a US
agent/distributor of Tadiran's business systems and consolidated
Tadiran Newbridge Networks into our financial statements.
"Infrastructure equipment experienced modest growth in the quarter.
DCME sales have flattened. However, we are making good progress in the
development and field trials of our new generation DTX-600, DTX-60,
ATX-600 and ITX-1000 which we believe will fuel the reacceleration of
DCME. We have already received initial orders for the new generation
systems. ECtel recorded good growth reflecting strong market acceptance
of its quality monitoring andfraud prevention solutions. Cross Connect
had a strong quarter with breakthrough sales achieved at important US
carriers.
"Access grew over last year. The pipeline for our wireless local loop
is very rich. We had important wins for the Hi-FOCuS in Europe and are
establishing it as the primary future platform for the new access
network subscriber approach.
"Within Networks, the microSDH and HFC posted strong growth. After the
close of the quarter, we announced major orders for Bogota's
Metropolitan Telecomunications Network and the Israel Defense Forces."
Mr. Rubner concluded, "Looking ahead, we are optimistic about the
outlook for our ADSL, Cross Connects, wireless local loop, SDH and DCME
products. We are particularly pleased that, in spite of the flatness of
DCME, our gross margins nevertheless remained strong. This is a
reflection of the strong gross margins of other product lines and our
decreasing dependence on any one product family."
Further to the Board of Directors' decision, an interim quarterly cash
dividend of $0.05 per share, to be paid out of the second quarter
profits, will be paid on or about August 26, 1999. The dividend, net of
taxes to be withheld at source and in compliance with Israel's foreign
currency law, will be paid to shareholders of record as of close of
business on August 12, 1999.
A provider of integrated network solutions, ECI TELECOM designs,
develops, manufacturers and markets digital telecommunications and data
transmission systems, enabling network operators to deliver
cost-effective services. ECI TELECOM's systems provide capacity
expansion, flexibility and management functions to better utilize
existing and new telecommunications, data and integrated networks.
This press release and additional information about the Company, is now
available on ECI TELECOM's site on the World Wide Web:
http//www.ecitele.com.
Certain statements contained in this release, contain forward-looking
information with respect to plans, projections or future performance of
the Company, the occurrence of which involves certain risks and
uncertainties, including, but not limited to, product and market
acceptance risks, the impact of competitive pricing, product
development, commercialization and technological difficulties and other
risks detailed in the Company's filings with the Securities and
Exchange Commission.
TABLE - 1
ECI TELECOM LTD.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands, except per share figures)
Six Months Ended Three Months Ended
June 30, June 30,
1999 1998 1999 1998
Revenues $574,691 $381,209 $290,210 $197,068
Cost of revenues 271,391 163,992 138,768 84,340
Gross profit 303,300 217,217 151,442 112,728
Research and development costs 85,035 58,511 38,936 30,251
Less - grant participations (15,856) (11,306) (6,704) (5,936)
Net 69,179 47,205 32,232 24,315
Selling and marketing expenses 92,106 65,154 46,213 34,519
General and administrative expenses 32,117 19,573 15,928 10,037
Amortization of acquisition-related
intangible assets 8,165 746 4,126 373
Restructuring expenses 25,382 - - -
Purchase of in-process
research and development 87,327 - - -
Operating income (loss) (10,976) 84,539 52,943 43,484
Financial income - net 8,589 4,861 3,083 2,811
Other income (expenses) - net (661) 419 (670) 852
Income (loss) before taxes on income (3,048) 89,819 55,356 47,147
Taxes on income 3,267 6,375 1,548 2,809
Income (loss) after taxes on income (6,315) 83,444 53,808 44,338
Company's equity in results of
investee companies - net (1,517) (1,528) (978) (807)
Minority interest in results of
subsidiaries - net (682) (2,505) 749 (2,505)
Net income (loss) (8,514) 79,411 53,579 41,026
Basic earnings (loss) per share ($0.09) $1.04 $0.58 $0.53
Weighted average number of shares
outstanding used to compute basic
earnings per share - in thousands 91,463 76,701 91,598 76,743
Diluted earnings (loss) per share ($0.07) $1.00 $0.57 $0.52
Weighted average number of shares
outstanding used to compute diluted
earnings per share - in thousands 96,337 81,440 96,153 81,613
TABLE - 2
ECI TELECOM LTD.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December
31,
1999 1998
(Unaudited) (Audited)
Assets
Current Assets
Cash and cash equivalents $216,104 $141,848
Short-term investments 151,517 299,679
Trade Receivables 431,274 251,303
Other receivables and prepaid expenses 49,956 30,495
Recoverable costs and estimated
earnings, not yet billed 19,684 9,843
Inventories 213,877 162,664
Total current assets 1,082,412 895,832
Investments, long-term bank deposits
and receivables - net of current 105,147 89,571
maturities
Property, plant and equipment - net 189,574 130,891
Software development costs - net 16,379 23,374
Other assets 154,992 11,265
Total assets 1,548,504 1,150,933
Liabilities and Shareholders' Equity
Current Liabilities
Short-term credits and current
maturities of long-term debt 67 121,140
Trade payables 78,104 53,788
Other payables and accrued liabilities 181,295 94,553
Proposed dividend 4,590 3,848
Total current liabilities 264,056 273,329
Long-term liabilities, net of current 93,910 105,559
maturities
Liability for employee severance 24,695 2,511
benefits - net
Minority Interest 7,652 6,442
Shareholders' equity
Share capital 5,759 5,317
Capital surplus 584,907 156,559
Net unrealized gain
on available for sale securities - 648
Retained earnings 589,175 606,890
1,179,841 769,414
Company's stock held by a (21,650) (6,322)
consolidated subsidiary
Total shareholders' equity 1,158,191 763,092
Total Liabilities and shareholders' 1,548,504 1,150,933
equity
Copyright (C) 1999 Business Wire. All rights reserved.
-0-
CONTACT: Doron Inbar
Leo Hinkley
ECI Telecom Ltd.
ECI Telecom Ltd.
Tel: +972-3-926-6585
Tel: 954-351-4328
Fax: +972-3-926-6700
Fax: 954-351-4404
or
Daniella Finn
Tel: +972-3-926-8995
Fax: +972-3-9266700
WEB PAGE: businesswire.com
GEOGRAPHY: INTERNATIONAL AFRICA/MIDDLE EAST
INDUSTRY CODE: TELECOMMUNICATIONS
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